Iran’s two largest steel producers—Khouzestan Steel Company (KhSC) and Mobarakeh Steel Company (MSC)—sustained significant damage from air strikes on Friday 27 March, according to company and industry officials. The attacks, attributed to US and Israeli forces, targeted power infrastructure, raw material stockyards, and finishing facilities at both sites, disrupting operations and threatening to curtail Iran’s steel export volumes for weeks or months ahead.
KhSC, Iran’s second-largest producer with annual crude steel capacity of 8.5 million tonnes, confirmed damage to its main power substation and hot strip mill, forcing an immediate shutdown of rolling operations. MSC, the country’s biggest steelmaker at 17 million tonnes/year, reported fires in its pellet and billet storage areas, with three production lines idled pending safety inspections and repairs. No fatalities have been confirmed, but several workers were injured, and emergency crews remain on-site to contain fires and stabilize infrastructure.
Prior to the attacks, Iran exported roughly 1.8–2 million tonnes/month of billet, slab, and rebar, primarily to buyers in the UAE, Saudi Arabia, India, and Southeast Asia. Market participants warn that sustained production losses could tighten supply in the Middle East billet market, where Iranian material typically accounts for 30–35% of traded volumes. Several UAE-based traders have already raised offers for April–May billet by $15–25/tonne in response to supply uncertainty.
“Both mills will need at least 2–4 weeks to restore partial operations, and full recovery could take months given the scale of damage to electrical grids,” a Tehran-based steel exporter told Argus. “We expect minimal export availability in April, which will push buyers to look for alternative supply from Russia, Turkey, and India—though those markets are already tight.”
Iran’s steel sector had been recovering in early 2026, with exports rising 12% year-on-year in January–February as global demand improved. The strikes mark a major disruption to the country’s industrial recovery and could further elevate regional steel prices amid heightened geopolitical tensions.
